Remodeling your home can be a huge undertaking and a large investment of time and money. 

You may not be concerned about this if you don’t plan to move for a while, but if you are planning to sell your home anytime soon, there are several things you should take into consideration. 

If you know who your potential buyers might be, what types of homes they are interested in purchasing, and which remodeling projects are the best and worst investments, you can be confident in your decisions about how you prepare your home for sale in Sacramento.

So, how do you determine how much you should spend and which projects you should do versus which ones are less important? According to the Remodeling 2019 Cost vs. Value Report, there are certain projects that may have a higher return on investment (ROI) than others. This data is specific to remodeling projects in the Sacramento area, and we will discuss some of these projects below.

Which Remodeling Projects Are the Best and Worst Investments?

The ROI varies greatly for different home improvement projects. Due to higher renovation costs, upscale homes tend to have smaller ROIs than midrange homes. A study compiled in the Remodeling 2019 Cost vs. Value Report shows data covering a variety of projects, including the cost of the job, the resale value, and the amount of the cost recouped when the homes were sold.

Kitchens

Excellent Investment for Minor Remodels in Midrange Homes; Not a Good Investment for Major Remodels in Midrange and Upscale Homes

Kitchens are the heart of the home for many families, so buyers are going to want a kitchen that meets their needs. If your kitchen needs a little updating, you might consider a minor remodel, which could include replacing cabinet fronts with something more modern, replacing some appliances and hardware, installing a new sink and faucet, and painting the room. This type of minor kitchen remodel in a midrange home may cost an average of $25,765, according to Cost vs. Value Report data. The resale value of this project averages $20,952, which means your ROI would be 81.3%.

A major kitchen renovation in a midrange home would cost $74,477 and have a resale value of 48,533, which makes the ROI only 65.2%. The ROI is even lower for a major kitchen remodel in an upscale home, which would cost $147,153, have a resale value of 81,964, and an ROI of 55.7%.

Bathrooms

Good Investment for Midrange Homes; Not a Good Investment for Upscale Homes and Universal Design

A typical bathroom renovation might include replacing fixtures, installing a new tub and ceramic tile, and installing a solid-surface vanity counter with a sink that is integrated. In the Sacramento area, this type of project would cost $24,513, and the ROI would be 75.1%.

With more high-end features, such as a frameless glass shower enclosure, body-spray fixtures, stone countertops with double sinks, and custom cabinetry, a bathroom remodel in an upscale home would cost $75,168, and the ROI would be 57.8%. 

Older buyers may look for specific features in bathrooms, including wheelchair accessibility, elongated toilet bowls, a walk-in shower, and fixtures and handles that are easily accessible. This type of design plan is referred to as Universal Design. If you decide to update your bathroom with a Universal Design in mind, the project will cost you about $38,584, and the ROI will be 60.8%.

Bathroom Additions

Not a Good Investment

If you are thinking about doing a complete bathroom addition, rather than remodeling an existing one, the cost will be greater, but that doesn’t mean you will get more of your money back when you sell your home. For a midrange addition, the cost would be $57,766, and the ROI would be 61.8, and for an upscale addition, the cost would be 103,655, and the ROI would be 60.4%.

Master Suite Additions

The Worst Investment

Many older homes lack master suites completely and instead have master bedrooms with shared bathrooms down the hall. The typical buyer in today’s market wants the convenience of a bathroom attached to their master bedroom. If your home doesn’t have a master suite, and you’re thinking of building an addition to include one, the cost is something to consider as additions can be expensive.

For a typical midrange home, a master suite addition may include a walk-in closet, a double vanity with a solid surface countertop, a freestanding tub and a separate shower, and fresh paint. It would cost $157,934, and the ROI would be 55.6%. 

For an upscale home, a master suite addition may include a larger sleeping area, a sitting area, a larger walk-in closet with dressing area, a walk-in shower with a dual-shower system, custom cabinetry and built-ins, a bar sink and refrigerator, and a high-end gas fireplace. The cost would be $323,847, and the ROI would only be 43.8%. While having a master suite may be attractive to buyers and help your home sell faster, you may lose money by adding one on.

Window Replacement

Excellent Investment

Buyers like the idea of energy-efficient homes, so if your windows are old and inefficient, you may want to have new ones installed. When it comes to window selection, wood windows bring a slightly higher ROI than vinyl ones. Vinyl windows may be available with a custom-color exterior finish, and can be suited for many homes. Vinyl windows have an ROI of 84%. Wood windows may be stained to match the hardwood inside the home, and exterior finishes include custom-color aluminum cladding. Wood windows have an ROI of 86.9%.

Roofing Replacement

Good Investment for Asphalt; Not a Good Investment for Metal

The Cost vs. Value Report studied the cost of roofing replacement using asphalt shingles and metal roofing material. Asphalt shingles are a little more than half the cost of metal roofing, and the ROI for asphalt shingles is 77.3%, making them an ideal choice for many homes.

If you like the modern, contemporary look of a metal roof and think it may be a better fit for your home, be prepared to pay quite a bit more, and if you do decide to replace your existing roof with a metal one, you should expect to see an ROI of 58%.

Deck Addition

Good Investment

A backyard deck can do a lot for a home’s aesthetic value. Who doesn’t like the idea of having BBQs and gathering with friends and family out in the backyard and relaxing on a spacious deck? Consider your budget when choosing material for your deck, as the cost varies a bit between wood and composite materials.

Backyard Patio

Not a Good Investment

A deck made with wood is cheaper than one made of composite material, and the ROI is higher. A wood deck may cost $16,704, and the ROI would be 78.8%, while a composite deck may cost $22,574, and the ROI would be 76.4%.

Siding

Excellent Investment

Replacing siding is one remodeling project that makes a huge difference in the look and curb appeal of your home. New siding can instantly make an older home look fresh and updated. And the good news is that siding replacement generally provides an ROI of 89.6%.

Manufacture Stone Veneer

Excellent Investment

Manufactured stone veneer looks and feels like real natural stone because it is made from molds using natural stones and colored with realistic, natural colors. Installing manufactured stone veneer on the exterior of your home brings an ROI of 112.5%, making this one of the most financially beneficial remodeling projects for those planning to sell their homes.

Entry Door replacement

Good Investment

Your entry door is one of the first things buyers see when approaching your home, so it’s important to make sure it’s in great condition. Replacing an old entry door with a 20-gauge steel unit may cost $2,032 and have an ROI of 72.7%. It’s well worth the money if your entry door isn’t in the best condition.

Grand Entrance

Excellent Investment

If you really want your home to get noticed, you might consider replacing an existing entry door with a brand new grand entrance. If you currently have a standard-sized entry door, this would include widening and reframing the opening to make room for a fiberglass unit with sidelights and decorative half-glass.  These grand entrances may also include wider casings made from hardwood and stained to match the new door. The cost to create this grand entrance may be $9,936, and the ROI would be 92.5%, making it an excellent choice to get your home ready to sell.

Garage Door Replacement

The Best Investment

If everything about your house looks amazing from the street, except for that garage door that is weathered, dented, or on its last legs, it’s the garage door that buyers will notice. Regardless of how great the rest of your house looks, a bad garage door may ruin your home’s curb appeal. The typical 16×7 ft., four-section garage door costs $3,836 to replace with a door that includes heavy-duty, galvanized steel tracks, and the ROI is a stunning 134.2%! Out of all the projects in the Cost vs. Value Report, this one had the highest ROI, and it is one of the things buyers will notice before they get inside your home, so it’s important to make sure your garage door looks fabulous.

What Does This Mean for You?

As you look over your home, think about ways you can make it appeal to more potential buyers. Not everyone has the same taste, but some basic things tend to draw buyers, such as neutral carpets and paint, great curb appeal, and updated kitchens and bathrooms. 

As you think about this, you may want to make a list of renovations to address. Maybe your house needs new paint, new carpet, or new countertops in the kitchen. In some cases, you may want to do a more thorough remodeling job, such as completely remodeling a kitchen or bathroom.                                 

When deciding how much work you should put into your home before selling it, you should determine what your budget is so you know how much you have to spend, then you can select the improvements you think will make your home as attractive as possible to buyers. With many home remodeling projects, you won’t necessarily get back the money you put into them, but those improvements may help you sell your house by making it more desirable to buyers.  

There are a lot of moving parts in the process of preparing your home for sale, and it may seem overwhelming. But if you consider what buyers are looking for, examine your home with a critical eye, and determine your budget for updates, you can make confident decisions about how to make your home as attractive as possible to potential buyers and set yourself up for home selling success.

As a homeowner, at some point, you may want to make changes to your home. This may range from minor updates to more major renovation projects, but some of these projects are costly and may not bring you a good return on investment (ROI).

According to the Remodeling 2019 Cost vs. Value Report, some remodeling projects have a greater ROI than others. The information in this report covers a wide variety of both interior and exterior projects and is specific to the San Francisco area.

While this report contains useful information, it does not include the cost of sweat equity. These cost estimates are based on using paid outside labor. It also does not include information on smaller projects that homeowners commonly do to upgrade their homes, such as cabinet refacing, laminate and vinyl floor installation, bathtub refinishing, and painting.

If you are preparing your home for sale, you can use the information in this report, along with current trends in renovation projects, to help you make the best decisions to make your home more appealing to potential buyers.

100% ROI Is Rare

Remodeling projects depreciate in value, and very few have a 100% ROI. In most cases, the ROIs are far lower than the actual cost of the renovations. This happens because technology improves, items break or wear down, and trends change over time. Additions, such as bathrooms, master suites, and family rooms have the lowest percentage of the costs recouped.

The US’s Trade War With China Will Cost You

A tariff increase from 10% to 25% in 2019 due to the US’s trade war with China has added significantly to the price of construction materials, including many high-end finishes, such as tile, countertops, laminates, and lighting. Consumers are paying more for these materials, but they aren’t recouping these extra costs, so this increase has caused the return on investment for remodeling projects to be lower than it may have been otherwise.

Interior vs Exterior Renovations

Across the US as in San Francisco, the average ROIs for exterior renovations were higher than those of larger discretionary remodeling projects or interior renovations. Nine out of the top 10 projects with the highest ROI in San Francisco are exterior renovation projects.

The reason exterior projects have higher ROIs is largely due to valuations set by real estate agents. They know how important “curb appeal” is to buyers, and this is reflected in these valuations. If homes don’t look great on the outside, many buyers won’t bother to look at the inside.

First impressions also make an impact on how much a buyer is willing to pay for a home. Real estate agents keep this in mind as they estimate the resale value of homes. To get the most out of the Cost vs. Value Report tool, homeowners should think like real estate brokers as they decide which improvements would be best to make their homes more appealing to buyers and provide the greatest ROI.

Manufactured Stone Veneer Takes The Top Spot In SF

While garage door replacements rank first for ROI in many areas in the country, manufactured stone veneer provides the greatest return in San Francisco. This involves adding stone to the lower third of a home’s front facade and extending it over the front entry. The typical manufactured stone veneer addition brings in an ROI of 153.6% of the cost recouped. This is a relatively low-cost project when compared to other more major projects, but the impact is high because it adds to the home’s curb appeal.

You May Love Your New Kitchen, But Will The Next Owner?

Kitchen renovations are the most popular remodeling projects, but if you want the best bang for your buck, the kitchen may not be a top priority. Only the minor kitchen remodel rivals the rate of return of most exterior projects. This type of project may involve replacing drawer fronts and front panels of existing cabinets, updating hardware, replacing appliances and fixtures, installing new flooring, and adding fresh paint.

Major kitchen remodels and larger projects, such as high-end bathroom and master suite remodeling projects may be too individualized to appeal to a wide range of buyers. While there is no universal agreement on the best design elements, there are certain design trends that have a wide appeal to homeowners, but because everyone has different tastes, one person’s new custom kitchen may appear tacky or outdated to some potential buyers.

Conclusion

If you don’t plan on selling your home for a few years, you may not be concerned with recouping the money you spend on renovations right now, but if you do plan to sell your home in the near future, then your ROI is something you should consider before making costly changes. 

According to the Cost vs. Value Report, it may be deceptive to apply national or regional information to specific homes since there are many other factors that affect valuations at the neighborhood or street level.

If you are thinking about a specific type of remodeling project, look at the ROI as well as current trends in the area before making any final decisions, and make sure to speak with your real estate agent about other ways to make your home appeal to the greatest number of buyers.